Mgt 418 - No Franchised Small Business Analysis

No franchised Small Business Analysis

MGT/418

Warren Leigh

September 21, 2015

Nonfranchised Small Business Analysis

Mel’s Country Café

Introduction

This paper will discuss the analysis of Mel’s Country Café, the business models. Training necessity, all issues that need investigating and the advantage and disadvantage of purchasing the business. The business chosen is Mel’s Country Café established in 1977 as Mary’s fried chicken and renamed Mel’s Country Café in 1994. Located in the suburbs of Houston the café brings a country feel to the city. Family owned and operated the restaurant targets families with their homemade feel to their meals. A new owner interested in purchasing the café must consider the performance and stability of the business (Mel’s Country Café, 2008). The paper will discuss what challenges a new owner may face and what negotiations are important prior to agreeing on any deal, we will also discuss why the feasibility analysis is important in knowing what to expect from the future of the company.

Business Model

The café is owned by Melody and her husband Jeffry who is also the executive chef, the business is ran by various members of the family which is one of the reasons for their success. Having a family owned and operated business allows the business to effectively meet the needs with the customers and identify with them, this business model type allows Jeffry and Melody to make sole decisions effectively and efficiently (Mel’s Country Café, 2008). The company has had success through all phases of the different business styles starting in 1977, gaining them the community’s respect and loyalty.

Training Necessity

With any company when you take over ownership of an existing business training needs to be provided in order for the new owner to have the knowledge of how the food is made and the company is ran successfully. With a new owner there would be a new chef since currently Jeffrey is the chef, and owner. The new chef would need training on the different meals and how to correctly prepare the products that are the cafes signature dishes. In order to maintain the freshness and quality of the food the new owner needs to know who the food vendors are and which ingredients are usually ordered from each supplier. The new owner will want to keep some of the popular products of the café and prices close to current prices so the customers keep coming back. By being trained properly on running the business as close as possible to the previous owners with out to many changes will keep the customers coming back. The training is important when taking over a new company so that business can in the future continue to be profitable and the food can stay as close to the original as possible, if not trained right the company could end up straying from what the customers want and have come to expect. The company has been family run for so long that it is important to understand what it is that makes this work, they have worked as a team and know what to expect from one another, a new team will not have the same connection and training could provide a better understanding on how to train new staff to work well together.

Feasibility analysis

When preforming a feasibility analysis the prospective owners need to observe weather the current team of management have benefited the Café, and do they have what it takes to keep the company successful. The new owner can also observe the employees and consider keeping some or all the current staff members which makes the switch to the new owner smooth. By knowing how the employees preform their work the new owner would know what to look for in new hires and how to train them. The new owners will need to analyse how the introduction of new menu ideas could be beneficial to the menu, is it something that could help improve business and bring new customers in. An analysis of the cafes past financial records will give a prospective buyer an idea of what the company’s revenue has been and what the business is currently worth, this will ensure that the prospective owner is not being overcharged. The company’s records can give the new owner an idea of what areas of the café are an issue allowing the new owner to find ways of fixing the issue prior to taking over the company. The analysis allows the new owner to see what the future profits of the company may be and if they will be able to profit quickly or lose any profit in the first years.

Negotiating with the seller

The negotiations of the business is an important part of purchasing a business. Negotiations on what the fair price of the business would be, many aspects could alter what the cost would be. Keeping the name could be beneficial to the new owners